How to budget for inspiration not deprivation.

The budget: that austere and arbitrary critic that tells you, “NO, you cannot go out for coffee, you cannot take a weekend trip, you cannot buy ice cream!”

If you don’t put your budget in its place, pretty soon, it will be looking down its pointy nose at you, reminding you how undeveloped your impulse control is, how you’ll never amount to anything, you’ll always be in debt . . . If that’s not enough to make a person give up, I don’t know what is!

Do you find yourself spending time with the budget Nazi in your head? Do you find yourself splurging and rebelling against its authoritarian austerity? Maybe it’s time to leave the relationship!

I prefer to spend my time with a very different sort of budget. One that doesn’t make me feel like some kind of loser every time I consult it. I’m not a financial guru at all–which is why I know that my budget strategy can work for anyone! If I can do it, so can you. Here’s how:

Make your budget at the END of the month! This way, your budget is just an honest friend here to tell you the truth about the way you spend your money. You’re making observations, not judgments. Once you have all the information, you’ll be in a position to make decisions based on your preferences.

Take an honest look and DON’T beat yourself up! You’re just exploring here, learning something about yourself and your spending. Think of it as an anthropology or psychology project. What can you learn about yourself? Some fascinating things I learned about our spending habits by having an end of month budget:

3 years ago I noticed that DH and I spent about $100 a month or $1200 a year having coffee out.

2 years ago, I discovered that when DH and I went to the nearby grocery store for one item we’d forgotten in our monthly shop, it always cost us a minimum of $15, no matter how small and insignificant the forgotten item was!

This fall, we discovered that we spent an average of 65-70 euros a month on wine.

Using information to recognize your options and make decisions: When we noticed that our coffee expenses were the equivalent to a plane ticket to Europe, we decided we preferred to drink our coffee at home or bring a thermos to a park bench. We noted quickly that we felt equally satisfied–if not MORE satisfied–with our decision to move to cheaper coffee and more trips home for DH (when we lived in the States).

As for the grocery stops for forgotten items? We realized that we preferred to save money by making a more careful list in advance. Extra grocery trips and impulse buys were not making us happier people!

As for the wine budget–it may seem extravagant, but we decided to keep it.

Why? Because we don’t eat out at restaurants and hardly ever go out for drinks or coffee. We enjoy wine-tasting on the weekends after a nice hike and having a glass of wine at home with diner. And since we know exactly how much we spend each month, we know we can afford it!

See your budget as a guideline to make you happier: If you look at your budget and tell yourself, “Hey, next month, I bet I’d be just as happy with fewer trips to the grocery store or having coffee at home!” It’s a lot easier to follow than telling yourself, “OK, next month, grocery expenses under $200 or BUST!”

The later technique kind of reminds me of the whole dynamic of going on a strict and depriving diet–it usually results in misery, crankiness and binging later. Doing something because you want to is much easier to maintain than doing something because you’ll be a no-good spending disaster with no self-control if you don’t.

What about your budget technique? Do you use a budget? Do you have budget-related guilt? Do you have budget goals?

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